Two Ideas of Freedomby Said Shiraziwww.dissidentvoice.org
April 13, 2004

The
stupidest thing a person can say in three words is the system works. When a
person says the system works, what they're really saying is I'm not hurting.
When a gang of police are videotaped beating a man to the ground repeatedly,
you are sure to hear that the system works. When a company’s board of
directors is indicted for dumping their own stock, it also goes to show that
the system works. It doesn’t matter whether any of the trials eventually
produce a conviction. Once beaten a man can not be unbeaten, nor will any
looted pension funds ever be recovered, but this is apparently of no
concern. Whenever the ongoing failure of the system becomes noticeable, some
commentator will be on hand to guide the public to the happy conclusion that
the system has worked yet again. People say the system works precisely when
it fails.

It is rare for someone to
examine our social system and actually say why they believe it works. One
attempt to do so which remains influential today was Milton Friedman's
Capitalism and Freedom, based on a series of lectures which were
originally delivered in 1956 at an academic conference at Wabash College. It
is a book which is becoming more and more timely today as the clock starts
to run backwards in America and we again hear proposals for a flat tax and
school vouchers.

In what seems an act of
willful perversity, Friedman presents his ultra-conservative ideas under the
name of liberalism, with the slender justification that the term had a
different meaning in the nineteenth century. He periodically resorts to
painting himself as a liberal at heart who nonetheless opposes every form of
liberal legislation, putting them off in the hopes of a day when the entire
population can be won over to the cause voluntarily through persuasion. In
this he is so pure that an ordinary Congressional majority is not enough for
him.

His sense of history is
horrifically warped and out of touch. His comment on the Hollywood blacklist
is to say that the system worked because the blacklist only lasted twelve
years and some of the people affected were able to find other kinds of
employment. He goes so far as to say hypothetically that things would have
been worse if it had occurred in Britain because the BBC is subsidized by
the government. This is taking a very long route around reality, in which it
did not happen in Britain; in fact, many blacklisted Americans fled there
for refuge.

In Friedman's view,
capitalism even deserves the credit for bringing the Puritans to the New
World. How so? Because, as he assures us, they accumulated the necessary
funds for their voyage in the market. You see, we must bow down and be
grateful to capitalism for every little thing since it was all paid for with
money. When Friedman tells us the South was enlightened in not imposing
property restrictions on the Negro after emancipation, he again seems to be
missing the forest for the trees. Furthermore the remaining problems of
racism will be solved by the market, he promises, since it would simply be
bad business to deny low-wage jobs to minorities. (When an economist tells
you the market will take care of something, be very afraid. It means nothing
will be done.)

Friedman blames the Great
Depression on a few poorly-timed decisions by the Federal Reserve Board,
thus neatly removing the greatest blemish on capitalism's record. If he had
been around, this glitch could have been avoided. We should remember though
that the strongest objection to capitalism is not periodic instability but
suffering. For most people the flaw in the system is not the recurring cycle
of crashes but rather unemployment and the inability to provide meaningful
work. The problem is not that the system breaks down, but that even when it
works it does not work for everybody. The instability of the system is thus
of most concern to those who benefit from it. For those suffering under it
the problem is if it never breaks down.

Like every defender of
capitalism, Friedman must briefly preach against monopoly; however he does
so in the context of downplaying its actual existence. True, the auto
industry may be dominated by a few companies but domestic service he reminds
us is not. He finds he can forgive the phone company in a gentle aside but
must go on at length hammering on the “monopoly” he considers the most
dangerous, labor unions.

Friedman makes an elaborate
show of arriving at each of his opinions judiciously but somehow he always
lands on the same square, dismantling the government. In one chapter he
argues that the AMA functions like a medieval guild but it seems that what
he wishes to replace it with is something akin to the modern HMO. He is
against the post office (he says the Pony Express was more efficient) and
the national park system; if people really want to see trees let them pay.
He chides the ACLU for not defending an employer’s “freedom” not to hire
minorities and his proposed solution to the day's controversy over
segregated schools amounts to discontinuing public education.

He is continually
diminishing the domain of what economists term "neighborhood effects," what
a layman would call the public good. One incontestable example of a public
good is immunization, which benefits not only the individual immunized but
their neighbor as well since it may prevent epidemics and even eradicate
some diseases altogether. Throw in the highways and there is little else
Friedman will concede. The state’s main role in his eyes is to enforce
contracts. Friedman wishes to reduce the great spreading and sheltering oak
of the public good to little more than an after-dinner toothpick. In sum, if
the marshall comes to evict you, that is good government. If they set a
limit to the amount of rent you can be charged, that is bad government.

Public housing he denounces
as paternalistic. Why not just give the poor some money, he asks
disingenuously, and let them buy what they need on the market? For one
thing, the market will overprice everything, as it does with pharmaceutical
drugs. Most conservatives labor under the misconception that taxes are
payment for services on the model of a business contract. By this logic, a
parent who chooses to send their child to private school should not have to
pay for a share of public education. Similarly, Friedman's main objection to
social security is that it is involuntary. If you were given a choice, you
could purchase a retirement annuity from a private source instead of the
government. But social security is not a service you purchase. It is a fund
into which everyone who works must pay and out of which everyone who works
may benefit. If taxes were voluntary no one would pay them; they are a
necessary evil of civilization.

Whether Friedman is
insincere no one can prove, but much of his rhetoric relies on the same
dirty tricks conservatives are using today. In discussing corporate taxes,
he brings up the dreaded injustice of being taxed twice. If a corporation
pays taxes on its profits and then its shareholders pay taxes on their
dividends, they have been taxed twice. Friedman's solution is to abolish
corporate taxes. On reflection this is obviously absurd. If you cash your
paycheck and buy a six-pack of beer, you are also being taxed twice, once on
your wages and again on your purchase. If you use your income to buy a house
and then pay property taxes on it, you are being taxed twice. If the state
is not going to derive all of its revenue from one form of taxation, then
citizens will inevitably be taxed multiple times in multiple ways. In theory
the net amount of tax should be the same and the issue of double taxation is
a false one.

Friedman's dirtiest trick
is the common one of dismissing a proposal he disagrees with as ineffective
and then acting as if he has refuted the principle behind it as well.
Progressive taxation does not achieve its goals, he claims, so we should
have a flat tax. This is an intellectual sleight of hand because it dodges
the crucial question of whether these goals are themselves worthy and thus
should be achieved by other means. This is the same device of trivialization
that neo-liberals like Krugman used to defend NAFTA years ago, arguing it
might as well pass because its actual effects would be small.

It is a similar sort of
trickery to say that because of all the loopholes in the tax code, a lower
flat tax could generate as much revenue as the current progressive tax. If
there are loopholes that should be closed then close them, but this has
nothing to do with whether taxation should be progressive or at a flat rate;
eliminating deductions would increase revenues with either system. (Friedman
makes the interesting point that trying to redistribute wealth through
taxation may backfire, because it only redistributes income. The old rich
will stay rich from their property while it will become harder for anyone
else to join their ranks by acquiring new wealth. Of course, he is not
proposing any measures to rectify this “problem.”)

Besides denigrating
idealistic measures as ineffective, Friedman puts his full weight behind the
ancient claim of fatalists that change is futile because nothing can be
granted without something else be taken away. He argues that the actual
effect of unions is to raise wages in one occupation while lowering them
correspondingly in others, as if wages were a closed system paid in one kind
of money somehow different from other money that circulates. By this logic,
raising the minimum wage will only increase unemployment. The money has to
come from somewhere, so if the boss pays one worker more he will just have
to pay another less or hire fewer people.

Some people believe that
this is the essence of economics, to say that you can't get something for
nothing. But at best the law of necessity can only be true of a system
operating at full capacity, which as anyone looking for work knows ours does
not. Economics is not merely the distribution of existing resources but the
production and use of them, and different uses will in turn produce
different amounts for distribution. If healthcare and training are provided
to workers they will be more productive and there will be greater total
resources available for everyone. We must remember to make a distinction
between productive and non-productive expenditures, between sharing and
waste: a closet full of unworn clothes, a garage holding a car that costs
more but does less, a second house that stands empty most of the year.

Most conservative thinking
is only shameless cruelty veiled by pompousness. It is not a Swiftian jest
but mechanical callousness when Friedman considers taking children away from
parents who can't pay for their education. The Chicago School shrouds their
savagery in the classics while entirely missing the point of humanism. Great
books may in the end be written by uniquely talented individuals, but from
Homer to Tolstoy their greatness always consists in reminding us of our
common humanity.

It is of the utmost
importance to understand that today's Republicans are not actually
reasonable people but in fact revolutionaries of a different stripe. The
radicals of the left have been purged, demoralized, bought off, entertained,
while the radicals of the right are in office actively pursuing their mad
dreams of Christian war. It is no accident that the conservatism of Fox News
today presents itself as pseudo-populist and opposed to "big" government.
The government is the only possible protector of the public interest against
corporations and the rich.

Amartya Sen's 1999 book Development as Freedom is a new defense of
capitalism for an era in which one is surprised anyone would bother. It is
some indication of the bubble in which our educated classes live that a man
can be awarded a Nobel prize for discovering that the poor starve to death
not for lack of food but for lack of money. In some famines, Sen relates,
not only is there no shortage but the prices of food have not even gone up.
Instead a crop failure has wiped out the wages of agricultural laborers. Sen
assures us that such famines do not and can not occur in democracies, where
there is an “incentive” to prevent them. It requires some fancy footwork on
his part to get around the fact that Britain was a democracy in the 1830's
when the Irish were allowed to starve, but get around it he eventually does.

Sen’s main thesis, which
grows out of his work on famine, is that freedom is both the means and the
end of economic development, that it is something which is good in itself
and which has the added advantage of being conducive to economic prosperity.
The belief is becoming widespread today that as freedom increases in a
country so will its wealth, either because happy workers are more productive
or because modern businesses such as software and entertainment demand more
individual creativity. To claim that freedom is also the goal of development
is a bold stroke that sadly must go completely unsupported here, since there
is no plausible evidence to back it up.

To Sen, capitalism is a
system that uses the tool of freedom to achieve the goal of freedom.
Logically however it is not possible for one thing to be both means and end.
If freedom is a means then it is necessarily a means to something other than
itself, in this case productivity, growth and increased profit. If it is an
end then it must be accomplished by some means other than itself or else it
would be accomplished immediately the moment the means were employed. Sen
wants the win-win of eating your cake and having it too, money-making and
feeling virtuous, but the old saying that no man can serve two masters would
be well-applied in this instance.

The pragmatic view of
development is that it aims to raise the living standards of the poor by
increasing their incomes. Sen encourages researchers to go beyond this
approach to look at more variables in the hopes of accounting for some
interesting anomalies, one being the fact that blacks in America have a
shorter lifespan than much poorer minorities in other countries. Another is
that civilian life expectancy actually went up during both World Wars;
though there was less food it was shared more equitably by rationing.

While it is good to look at
additional variables in search of a more complicated picture, one should not
create a false complexity or pseudo-originality by renaming all one’s terms.
In Sen's new rhetoric, poverty is called "capability deprivation." I suspect
that calling disease and hunger forms of “unfreedom" as he does is the start
of an intellectual shell game that does not end with the poor being much
better off. Speaking of a “freedom not to starve,” Sen begins to sound like
the Clash's satirical public service announcement reminding us we have the
right not to be killed. Reading Sen as he tries to grasp hard realities in
this cautiously analytic language of abstractions is like watching someone
try to punch their way out of a wet paper bag.

Sen attempts to justify all
of what we call human rights by describing them as varieties of freedom, but
while this might be intended to give them a stronger foundation in fact it
works to diminish their intrinsic importance. At the same time he blurs the
concept of freedom until it seems to mean everything and nothing. It no
longer means political freedoms like the right to vote and the right to
express oneself.

Essentially Sen does not
propose any real change to global capitalism but rather a new and
disorienting set of terms and an alternate scale of weights and measures.
For him, to simply give people help with no strings attached is an insult to
their “agency” which reduces them to passive recipients. He whitewashes
global capital by scrawling a thin and implausible pseudo-idealism across
every aspect of it; his book is like a World Bank Mad Lib where every noun
and verb has been replaced with freedom.

There is a long liberal
tradition of changing terms rather than changing policies. This is something
like changing your diaper rather than learning to stop soiling yourself.
Liberal rhetoric is partly a way of avoiding reality and partly of offering
empty phrases as a substitute for change. In its more academic form it also
serves the purpose of excluding ordinary people from the discussion,
paralyzing them with confusion or intimidating them into silence. I guess
we're supposed to be grateful that an establishment figure even admits there
is poverty in the world, but reading Sen's book I felt like an innocent man
being told to take a plea bargain because it was the best deal he was going
to get.

In our time the post-Soviet
triumph of capital has moved from crowing to revisionism. Most of this book
reads as if it came from an imaginary planet where socialism never happened.
On page 28, Sen praises capitalism not in comparison with socialism but
rather against slavery! When Sen compares China and India's performance in
the market he notes the former has been more successful because of the
"social commitment of the pre-reform regime to health care as well as
education." Put plainly, Chinese communism took better care of its general
population, which gave them a headstart in the post-communist world. On page
6, Sen argues that the market system can neither be defended nor attacked,
but rather that the right to buy and sell is itself a basic liberty. Here he
goes so far as to claim that capitalism is synonymous with freedom, even for
those who have nothing to sell, nothing to buy with.

What has changed in the
forty years since Friedman? The short-sighted claim that there is no
alternative to the market has gone from the marginal view of besieged
conservatives to a central pillar of the “neo-liberal” orthodoxy.

One of
the great myths of capitalism is that private enterprise is inherently more
efficient than government. It is absurd to state that a private corporation
like Edison Schools could provide a better education with a smaller budget
and still have enough extra left over to draw their profit. Where does the
extra come from? Two minus two does not equal five. It is claimed that
competition produces efficiency, but by definition it involves considerable
duplication of effort and redundancy. It is claimed that people of ability
are drawn by high salaries which can only come from private sources, but it
is not true that self-interest is a stronger motive than idealism. Was your
Bible written for pay?

The greatest obstacle to
socialism today is the false perception that socialism is an idea while
capitalism is not, that the latter is the result of letting nature take its
course while the former would mean unleashing a troop of eggheads to wreak
havoc on our traditional way of life. Really the defense of capitalism
consists in the lie that it is inevitable, which is why it is explicitly
defended so rarely. Socialism is not unrealistic, it is not even idealistic:
it is simply practical. If something needs to be done, let’s get together
and do it ourselves rather than drawing up specs and waiting for bids.
Nevertheless I do not believe that socialism will ever make a comeback in
the U.S. The cause will soldier on under the confused rubric of
anti-globalization, without the intellectual heritage of its predecessor but
also without its accumulated stigmas.

In the end freedom may be
the most abused word in our language, beating out truth by several lengths.
When mainstream economists argue that the freest system is capitalism, they
are missing the point of freedom altogether, which is choice. To me freedom
would mean freedom from a fucked-up system that uses the specter of sickness
to terrorize its own population and trades pills for the votes of the
elderly, a system that knows how to punish schools but is unwilling to bear
the burden of funding them properly, a system that uses terrorism as a
bogeyman against internal disagreement while failing to take necessary
measures against the actual threat.

In a world in which there
is only capitalism, having someone tell you that you are free does not make
it so. If we are given a choice between market operations and the public
sector, we are free. If we are given the market and told that it is good for
us, we are not.